In its monthly retail outlook survey, the Dallas Fed found inventories rose as less than 27 percent of business executives reported an increase in sales, and only 25 percent of respondents expect performance to improve in the next six months.

Additionally, about 10 percent of retailers said they lowered employment, and 31 percent plan to cut their payrolls in the near future.

The Dallas Fed collected data from 240 Texas business executives between April 16 and 24. It will release its next report on May 29.